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Edtech’s brightest are struggling to pass

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Summary

Edtech companies, some of which have been valued as high as $3 billion, are struggling and conducting layoffs as the funding atmosphere has been impacted by the anticipation of a recession and increased need for ROI to investors. This week, Outschool and Class conducted layoffs, and Airtable and Plaid cut staff as well. African fintech unicorn Chipper Cash also conducted layoffs, and FTX marked down its valuation from $2 billion to $1.25 billion. AI avatars have become popular on tech Twitter, but there are questions about how they are being used and their impact on artists. Good news this week includes Equity Crew attempting to recap 2022, TC's Dominic-Madori Davis writing about women rising through the ranks at VC firms, and a restaurant on campus reopening after the pandemic.

Q&As

What was the reason behind Outschool's double round of layoffs?
The reason behind Outschool's double round of layoffs was a focus on core capabilities as "growth has come back down to earth," due to the anticipation of a recession, higher interest rates and an increased need to show return on investment to investors.

What other edtech companies have experienced layoffs, executive shifts or marksdowns in the last quarter of 2022?
Other edtech companies that have experienced layoffs, executive shifts or marksdowns in the last quarter of 2022 include BloomTech, Vedantu, Teachmint, Reforge, Coursera, Unacademy, Byju’s, Udacity, Brainly, Quizlet, Degreed, Invact Metaversity, Class, and Chipper Cash.

What implications does the use of AI image and text generators have for artists?
The use of AI image and text generators has implications for artists in terms of being appropriately credited and paid for their work, as well as the future of creation.

What prompted Airtable and Plaid to conduct layoffs?
Airtable and Plaid conducted layoffs due to a downturn in the economy and a need to cut costs to become profitable.

How is Outschool pivoting to combat the learning loss caused by the pandemic?
Outschool is pivoting to focus more on the tutoring end of its platform to combat the learning loss caused by the pandemic.

AI Comments

👍 This is a very well-written article, giving a nuanced and comprehensive overview of the current state of EdTech.

👎 This article does not provide any clear solutions for the EdTech companies in question, and the writer does not explore the implications of these layoffs in any depth.

AI Discussion

Me: It's about how some of edtech's brightest companies are struggling to pass despite their high valuations and investments. It looks at the layoffs at Outschool, Class, BloomTech and other edtech companies, as well as executive shifts like Quizlet's CEO stepping down and Degreed's CEO stepping aside for the founder's return. It talks about how the pandemic has caused a surge in demand for edtech, but now the sector is shifting from a disruptive mood to maintenance mode.

Friend: Wow, that's really interesting. It's sad to see that the companies that benefited from the pandemic are now facing difficult questions about how to navigate a downturn. It seems like the pandemic has caused a lot of disruption in the tech sector, and it's not just edtech that's struggling. What are the implications of this article for the edtech industry?

Me: The article highlights how the edtech sector has experienced rapid growth and high demand due to the pandemic, but now it's having to adjust to the reality of a downturn. It also shows that the startups that enjoyed a pandemic-era boom are now having to downsize and cut costs due to an expectation of needing to show a return on investment to investors. This could mean that edtech companies will need to focus more on their core capabilities and become more efficient in order to survive. Additionally, the article also highlights the ethical implications of AI image and text generators and how they could change entire industries if left unchecked.

Action items

Research the edtech sector to understand the current trends and challenges.
Reach out to edtech companies to understand their strategies for navigating the downturn.
Follow the news and developments in the edtech sector to stay up to date on the latest developments.

Technical terms

Edtech: Short for educational technology, edtech is the use of technology to improve educational outcomes.
Unicorn: A startup company valued at over $1 billion.
Series B, C and D: Series B, C and D are rounds of venture capital funding.
Total Addressable Market (TAM): The total addressable market is the total potential revenue a company can generate by selling its products or services to a given market.
Return on Investment (ROI): Return on investment is a measure of the profitability of an investment.
SoftBank Vision Fund II: SoftBank Vision Fund II is a venture capital fund managed by SoftBank Group.
Coding Bootcamp: A coding bootcamp is an intensive program designed to teach coding skills in a short period of time.
AI Avatar: An AI avatar is a computer-generated image or video of a person.